Every industry has its own quirks that present challenges and opportunities to companies. The lip balm market is no exception to this.
The founders of EOS saw that the lip balm market was full of established competitors who did not put much effort in the products that they sold. Examples were Chapstick which was owned by Pfizer and and Burt’s Bees who is now owned by Clorox. For many years these companies rested on their laurels and did not innovate their products (https://www.fastcompany.com/3063333/startup-report/the-untold-story-of-how-lip-balm-upstart-eos-outdid-chapstick) in order to accommodate for the changing tastes of their customers.
EOS had identified the customers of the lip balm market to be filled of companies that were competing only by offering reductions on the price of their products and not be innovating or creating new lip balms that met the tastes of users. Today’s customers were demanding higher quality products that were organically grown and all natural. Existing lip balms tasted medicinal and were based with petroleum jelly, a derivative of oil.
EOS decided to develop a lip balm that was all natural, organic, and had interesting flavors that appealed to modern tastes. Berry and melon flavor combinations are examples of the different flavors that EOS developed. They then designed a colorful applicator orb that stood out on shelves from the standard applicator tubes that were on the market. Despite the original shape the EOS lip balm applicator orb was still sanitary and did not require users to use their fingers.
EOS then concentrated on building a distribution network and started with Walgreen’s who were their first major retailer that carried their products. From there, EOS spread and developed a larger distribution network that allowed them to reach a wider range of customers from Target and Walmart.
EOS innovated their competition and created a brand that resonated with their customers in a way that their competition didn’t, which allowed them to grow their market share at the expense of the competition.
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